TaxTMI 
TaxTMI 
2022 (4) TMI 675
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....n ITA No.255/2018-19/CIT(A)-15 & 35/2018-19/CIT(A)-15 dated 30.04.2019 & 31.01.2019 respectively. The consequential assessments were framed by the ACIT / DCIT, Corporate Circle - 6(2), Chennai u/s. 143(3) r.w.s. 263 of the Act, vide orders dated 20.12.2018 & 21.05.2018 for the assessment years 2013-14 & 2014- 15 respectively. ITA Nos.1311 & 1312/CHNY/2018 2. The only common issue in these two appeals of assessee against the revision order passed by PCIT u/s. 263 of the Act is as regards to the assumption of jurisdiction by PCIT u/s.263 of the Act, where the AO has conducted proper enquiries and has applied his mind and framed assessment and taken a possible view on the issue. For this assessee has raised identically worded grounds as regards to the issue of assumption of jurisdiction in both the years and hence, the relevant grounds as raised in assessment year 2014- 15 in ITA No.1312/CHNY/2018 reads as under:- 1.1 The impugned order of the CIT u/s263 is erroneous, opposed to law and facts and is liable to be set aside. 1.2 The CIT erred in passing the order without application of mind and without adverting to the detailed submissions made before him. ....
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.....It is evident from the records that though the appellant has raised the issue of jurisdiction of the Commissioner, under Section 263 to initiate suo motu revision especially when an appeal against Assessment Order has been filed and heard and order has been passed by the Appellate Commissioner and though the Tribunal went into the merits of the case, it has not decided about the jurisdiction. The jurisdiction point is an important point to decide the matter and therefore, the order passed by the Tribunal is set aside and the matter is remanded to the Tribunal to decide about the jurisdiction. The above substantial questions of law are answered accordingly. 3.1 In term of the above, the ld.counsel for the assessee stated that this appeal is being revived by the Hon'ble High Court has clearly directed the Tribunal to decide the issue of assumption of jurisdiction by PCIT for revising the assessments u/s.263 of the Act, for these assessment years. The ld.counsel for the assessee took us through the grounds raised which are reproduced above. The ld.counsel first of all took us through the show cause notice issued by PCIT dated 20.02.2018, which is enclosed in assessee's Paperbook a....
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.... centre at Oragadam C. Approval of scheme cost for setting up a growth centre at Oragadam by Government of Tamilnadu D. Profit & Loss statement of the Oragadam Projet Further, the AO vide notice u/s.142(1) dated 28.11.2016 and questionnaire along with the same, required the assessee to explain vide question No.4, the claim of deduction u/s.80IA of the Act. The relevant question reads as under:- 4. Please explain how the following incomes are eligible for deduction u/s. 80IA a) Plot maintenance charges - Rs. 36,50,582 b) Water Charges - Rs. 5,74,02,133 c) Rent - Rs. 2,03,17,777 d) Grant received - Rs. 18,05,129 e) Interest on water charges, Maintenance Charges etc., - Rs. 7,03,262 f) Misc income - Rs. 39,99,697 The assessee replied vide letter dated 02.12.2016 and the relevant answer reads as under:- b. Income eligible for deduction u/s. 80IA: In computing the profit and gains of the Oragadam Project, the eligible business under section 80IA of the Income Tax Act, 1961, we have included the following income. i. Plot maintenance charges 36,50,582 ii. ....
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....pects i.e., claim of deduction u/s.80IA of the Act as well as contribution to guidance. The ld.counsel for the assessee stated that in assessment year 2013-14, the AO in view of the above allowed the claim of assessee after considering the submissions in details on both the issues. 6. The ld.counsel for the assessee stated that in such situation, the Hon'ble Madras High Court in the case of AVM Cine Products vs. DCIT, [2021] 123 taxmann.com 41 has considered the allowability of claim of deduction u/s.80IA of the Act on interest earned by assessee and the Hon'ble High Court vide para 25 to 27 held as under:- 25. WE do not find any such occasion to artificially bifurcate and dissect the interest income earned by the assessee in the present case in its ordinary course of business, so as to take it out of the ambit of deduction available to it under section 80-IA of the Act. The efforts on the part of the Revenue authorities to create such artificial compartments in the "business income" of the assessee, merely to reduce the quantum of deduction available to the assessee under section 80-IA of the Act of which the eligibility of the assessee is not even in doubt, is nothing....
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....as to the effective source from which such income earned and if it is found that it is derived from secondary source, it is not the effective source, which falls outside the purview of such like provision, which provides for deduction. 25. In the instant case, the requirement of the Assessee to furnish the fixed deposit was a pre-condition to enable the Assessee to open a foreign Letter of Credit for the purpose of import of critical components for the manufacture of wind mill. This incidentally had earned some interest. As pointed out by the Hon'ble Supreme Court in Shree Rama Multi Tech Ltd., it is not the Assessee's surplus money, which was deposited by way of fixed deposit, which had earned interest; on the contrary, it was a pre-condition for the purchaser/Assessee to enable him to import the critical component for the purpose of manufacturing. Furthermore, it is not the case of the Revenue that the amount was deposited in fixed deposit solely for the purpose of earning interest nor it is the case of the Revenue that the amount, which was deposited in fixed deposit was a surplus money, which was lying idle in the hands of the Assessee. Therefore, whatever inco....
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.... not an assessment order. In this case, during the assessment proceedings for both the Assessment Years, the Assessing Officer issued a query memos to the assessee, calling upon him to justify the genuineness of the gifts. The Respondent-Assessee responded to the same by giving evidence of the communications received from his father and his sister i.e. the donors of the gifts along with the statement of their Bank accounts. On perusal, the Assessing Officer was satisfied about the identities of the donors, the source from where these funds have come and also the creditworthiness/capacity of the donor. Once the Assessing Officer was satisfied with regard to the same, there was no further requirement on the part of the Assessing Officer to disclose his satisfaction in the Assessment Order passed thereon. Thus, this objection on the part of the Revenue, cannot be accepted. 8. It is next submitted that the donor had not been examined by the Assessing Officer. It is not in every case that every evidence produced has to be tested by cross examination of the person giving the evidence. It is only in cases where the evidence produced gives rise to suspicion about its veracity that....
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....r was satisfied, consequent to making an enquiry and examining the evidence produced by the Assessing Officer, establishing the identity and creditworthiness of the donor as also the genuineness of the gift. The CIT in his order of Revision, does not indicate any doubts in respect of the genuineness of the evidence produced by the Assessee. The satisfaction of the Assessing Officer on the basis of the documents produced is not shown to be erroneous in the absence of making a further enquiry. It is made clear that our above observations should not be inferred to mean that it is open to the Assessing Officer to enquire into the source of source for the purpose of the present facts. This is a case where a view has been taken by the Assessing Officer on enquiry. Even if this view, in the opinion of the CIT is not correct, it would not permit him to exercise power under Section 263 of the Act. In fact, the Apex Court in Amitabh Bachchan (supra) has observed that there can be no doubt that where the view taken by the Assessing Officer is a possible view, interference under Section 263 of the Act, is not permissible. 6.3 The ld.counsel stated that even Hon'ble Supreme Court in the case....
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....e or any other person. 8. We have heard rival contentions and gone through facts and circumstances of the case. The assessee company is an autonomous society set up by the Government of Tamil Nadu and functions as an Industrial Guidance and Export Promotion Bureau of Tamil Nadu. This entity acts as a conduit between the prospective investors / entrepreneurs and the Government of Tamil Nadu for signing of Memorandum of Understanding and bringing investments in the state of Tamil Nadu. The assessee for these two assessment years i.e., AY 2013-14 & 2014-15 claimed deduction u/s.80IA of the Act in respect of interest income amounting to Rs. 1,80,03,358/-, sundry income of Rs. 10,55,33,636/- and other operating revenue of Rs. 7,34,67,288/- which represents interest on old loans and advances. This is for assessment year 2013-14. As regards to assessment year 2014-15, the assessee claimed deduction u/s.80IA of the Act to the tune of Rs. 93,40,83,416/- but the AO disallowed the claim of deduction u/s.80IA on various incomes (including interest of Rs. 8,78,78,580/-). The AO disallowed claim of deduction u/s.80IA of the Act. The AO in both the years allowed contribution to guidance of Rs.....